The World of Technology:

The Keystone to Improving

Financial Literacy

Jonathan Zhao
Intern/Mentor I
March 22, 2016

Stephen Lee
Wagener-Lee Wealth Advisers, LLC

Mary Jane Sasser

River Hill High School

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Imagine the year is 2020. A freshman college undergraduate recently graduated from
his local high school last May, and is currently embarking on his first steps of his college
journey. At first, all is well, until his first student bill comes. Without any insight as to how to
handle this, he simply takes a loan, brushes it off and moves on. This process continuously
occurs, until he is forced to drop out, due to the inability to pay back his loans, leaving him
with a six-digit debt looming over his head and no education. While such a hypothetical
situation may seem a bit improbable at first, such is not the case; the Institute for College
Access and Success reports that in 2012, 1.3 million students graduat[ed] with debt, with an
average of $29,400 per student, which was an 25% increase from $23,450 in 2008 (Institute
1). Each year, the debt accrued from college education continues to steadily rise without any
indication of subsiding. To help combat such a crippling problem, effective and up-to-date
financial literacy programs must be implemented and distributed to high school and college
students around the world. While many conventional financial literacy curriculums still exist
and are in use, the 21st century society is entering a new revolutionary era dominated by the
world of technology. For such a reason, current financial literacy curriculums must be
changed to become more reliant on technology, because digital financial literacy programs are
more effective than their paper-and-pen counterparts, more appealing and pertinent to todays
digital natives preferences and natures, and more necessary in todays and tomorrows fastpaced and technology-driven society.
For the past few decades, many have ventured into the business world without a firm
grasp of their own personal finances. The problem? Financial illiteracy. In most situations,
being financially literate is defined as having both an understanding of financial products and

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concepts and [an] ability to appreciate financial risks and opportunities, to make informed
choices, to know where to go for help, and to take other effective actions to improve their
financial well-being (Godfrey, Levesque, Miller 2). Yet without effective education, both
college students and adults today remain blinded and heavily susceptible to the harmful
pitfalls one can face when financially illiterate during ones college, adult, and retirement
years.
For example, from a recent Programme for International Student Assessment (PISA)
2012 financial literacy report, researchers found that 15% of students, on average, score
below the baseline level of performance in the PISA financial literacy scale. At best, these
students can recognize the difference between needs and wants, make simple decisions about
everyday spending, recognize the purpose of common financial documents, such as an
invoice, and apply single and basic numerical operations in contexts that they are likely to
have encountered personally (PISA 13). This 2012 PISA financial literacy report primarily
serves to show educators, parents, and even the students themselves the nations current dire
situation of financial illiteracy. How can todays generation of students be able to correctly
file their taxes, write out checks, and balance their savings during their adult and retirement
years when some are still having trouble with adding and subtracting, or deciding between
needs and wants?
But the problem does not stop there - the dilemma of financial illiteracy is apparent
not only in the United States; it is also seen widespread around the globe. In many countries,
such as Australia, Serbia, and Egypt, financial illiteracy is not an uncommon subject. Even in
well-developed countries such as Europe and Canada, students financial literacy is lacking.

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Take Zambia for example - due to their immense lack of financial knowledge, many citizens
are forced to engage in poor decisions; for instance, only 29% of adults have a bank account
[and] more than two thirds of people are unfamiliar with basic financial products and tools
such as checking accounts, automated teller machines, and debit cards (Godfrey, Levesque,
Miller 4). These situations not only provide grounds for imprudent spending, but also create
an environment that fosters a high risk of money scamming from outside parties.
[Figure I] shows a VISA Barometer taken in 2012, which measures parents opinions
on how financially literate todays teenagers and young adults truly are (VISA 5). Out of the
28 countries listed, only four of them, Vietnam, Indonesia, Colombia, and India, had a score
of 50 or higher out of 100, meaning that only within a select few countries, a majority of
parents were confident that high school and college students had the knowledge to make
financially sound decisions. An even deeper look shows United States in 2 nd to last place
compared to other countries, only beating Bosnia, with a dismal score of 18.5/100, showing
that less than 20% of parents would put faith in todays teenagers and young adults to make
the correct financial decisions. While the U.S. is nearly last, it is also important not to forget
the entire picture; many other affluent and well-developed countries depict low and
unpromising scores as well, such as Canada and Japan, allowing educators, researchers, and
parents to see and realize the true extent to which financial illiteracy has plagued countries all
across the globe.
However, this problem has not gone unnoticed and untreated. Over the past few years,
more and more high schools have started to offer financial literacy education, or [any source
of education] that provides individuals with the knowledge, aptitude, and skill base necessary

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to become questioning and informed consumers of financial services (Jarecke, Taylor, Hira
2), to help students make smarter financial decisions and more capable of managing their own
finances.
But the disconcerting fact is that customary paper-and-pen based high school financial
literacy programs being provided for students today have been proven ineffective towards
teaching students finance. For example, every Jump$tart survey since 2000 found that
seniors who have completed a full-semester high school course in finance are no more
financially literate than students who have not taken such a course (Mandell, Klein 3).
Furthermore, in a study conducted in 2009, it was found that students who had taken a
financial literacy course had averaged a score of 68.7% on a national Jump$tart exam, and
those who had not averaged a score of 69.9% (Mandell, Klein 5). In both situations, the
findings clearly indicate to educators and parents how inadequate and ineffective these
programs truly are. With a mere difference of 1.2% in test scores, these financial literacy
classes are clearly outdated, and simply an unsatisfactory use of time and resources for both
schools and students, thus calling for a much-needed reformation of literacy courses.
Moreover, high school financial literacy courses have not only been proven
ineffective, but also proven underdeveloped. Over the years, a majority of high school
financial literacy curriculums have been created based off of adult models; most of what is
known about program effectiveness has been built on an adult program model, and the bottom
line is that there is not likely to be a one-size-fits-all financial education program for
consumers (McCormick 3). In life, adults are very different from children and teens, and in
regards to education, it is no different; what may work on adults may and will not necessarily

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work on a child or teen. Currently, we have no clearly defined or widely accepted standards
of excellence for financial education effectiveness (McCormick 3), making it more difficult
to pinpoint areas of improvement, and render aide.
While many financial literacy programs have been proved ineffective, there have been
a few exceptions: programs reliant on technology, such as videos, computers, games, etc.,
have been proved to be substantially more effective than their pencil and paper counterparts.
One such example is the Stock Market Game (SMG), a technology-based program that allows
students to interact on the World Wide Web through the stock market. Jump$tart Coalition for
Personal Financial Literacy indicates that since 2000, students who participated in SMG
have consistently outperformed all other students who participated in all other forms of
money management education Specifically, 2006 Jump$tart Coalition Survey results
showed that students who played a stock market game simulation performed better in terms of
financial literacy than other students (Harter, Harter 1), thus proving the Stock Market
Games efficacy in teaching kids money management. One of the main reasons why the Stock
Market Game works so well is due to its legitimacy and relevancy to the real world; These
games provide the students with an opportunity to apply the financial concepts they have
learned in classrooms to real-world business decisions (Dougherty, Subramanian 1).
Contrary to many programs being offered today, the Stock Market Game provides students
with real world applications, such as stock trading and asset evaluation, usually not included
in the customary text-book curriculum.
Quickbooks, Excel, and other accounting-based tools are other examples of highly
successful technology-reliant financial programs. When teachers utilized technology based

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accounting tools in the classroom, improved performance in the computerized classroom did
occur The differences were the result from the effect of a computerized environment on
active learning (Lusher, Huber, Valencia 3). These technology-reliant tools are so efficient
because they engage the viewer and provide an easy and enhanced way of communicating
information that cannot be achieved by other methods. Furthermore, another benefit of
adopting these computerized curriculums is the win-win situation for high school students in
that they are both exposed to utilizing computerized technology, while also learning the
designated curriculum since computerized classroom help[s] students learn accounting
concepts better while gaining computer competency skills (Lusher, Huber, Valencia 10).
Another factor that propels the need for a switched curriculum in financial literacy
curriculums is also the massive influences of technology in todays society; the customary
teaching techniques prevalent in the 20th century are no longer effective for students in the 21st
century. Those born in todays generation can be classified as digital natives, native
speakers of the digital language of computers, video games and the Internet (Prensky 1).
From the moment these digital natives were born, technology has been an integral part of their
lives, helping them grow every step of the way. While todays generation of students do still
rely on the conventional paper and pen teaching, they have spent nearly every second of their
lives with technology - todays average college grads have spent less than 5,000 hours of
their lives reading, but over 10,000 hours playing video games (not to mention 20,000 hours
watching TV). Computer games, email, the Internet, cell phones and instant messaging are
integral parts of their lives (Prensky 1).

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Furthermore, the pervasive influence of technology is not only limited to our daily
social lives; it has managed to also penetrate the classroom environment, for it has been
proven that web-based classrooms are indeed more efficient than the customary classroom
environment. In a study conducted on classroom working environments for students, the
overall results indicated [Web-based Instruction] WBI was 6% more effective than
[Classroom Instruction] CI for teaching declarative knowledge (Sitzmann, Kraiger,
Stewart, Wisher 1) Many modern research projects have shown that a web-based classroom is
more effective for students than a customary-based classroom. While 6% may not seem too
significant, by investing in such a switch, financial literacy education, and education in
general, will experience the much needed first steps in teaching and retention efficacy. What
many conventional teachers fail to realize is that our students have changed radically.
Todays students are no longer the people our educational system was designed to teach
(Prensky 1). In order to create effective programs, educators and researchers need to cater to
the needs of the individual, which in this case is the 21 st digital native. The conventional, yet
outdated techniques that proved quite effective with the 20th century citizens are no longer
applicable with todays generation of students. By complying to todays students inherent
comfortability with technology, educators can create financial literacy curriculums that are
both effective and appealing to 21st century digital natives.
With technology being more and more integral to everyday lives, the importance of
learning financial literacy through the medium of technology is greatly accentuated, since as
time passes on, managing ones finances will likely be done solely online. Yet, for many high
school and college students, there is a tendency for ignorance towards financial literacy. A

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wide range of young adults believe that this topic of education is not as important as the
conventional biology or chemistry class, when in reality, financial literacy may be of equal or
even more importance than the traditional high school subjects. As seen in many financial
journals and research studies, those who are financially literate are more likely to practice
prudent spending, compare products, and discuss monetary matters with their children. On the
other hand, consequences due to illiteracy can include inequality in the distribution of income
and wealth, inadequate savings for retirement, low savings rates, and inflation (Mandell,
Klein 2). Other repercussions include a tendency towards problems with debt, engagements in
high-cost credit, and failure to plan out for the future (Godfrey, Levesque, Miller 3).
The sobering fact is that, by the time todays generations of students reach their adults
years of 30-40, being able to manage ones finances online, or even in general, will be a
necessity for a successful livelihood. Pew Research Center reports that in 2010, 46% of U.S.
adults said they bank online (Fox 1). Furthermore, [Figure II] shows a time graph of
percentage of users who online and mobile bank from 2000 to 2013. From the graph, there is
an indicated 43% increase in online banking, even when technology was still in its novelty
age. This significant jump in usage displays the overbearing influence of technology on
todays society. In 10-20 years, online banking usage percentages will soar even higher, and
being able to manage ones finances electronically will become a necessity.
While many adults have managed to transfer over into the world of technology in
regards to personal finance, a good amount of adults in the United States is still left managing
their finances by hand with paper and pen. Why? Based off of a 2013 Pew Research survey,
researchers found that 32% of non-internet users said the internet was too difficult to use,

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including 8% of this group who said they were too old to learn (Anderson, Perrin 1). The
fact is a majority of these adults were not exposed to or educated on how to finance online,
resulting in struggling adults who are required to resort to less efficient methods of managing
their personal finances. In financial literacy curriculums being offered today, such is a
problem similar to the dilemma many adults are facing. By failing to expose high school and
college students to personal finances through the world of technology, rather than the
customary teachings, these young adults venture out in the real world, with little to no
information as to how to properly maintain their personal finances, which could result in
financial disasters. However, by investing in the switch to web-based financial literacy
curriculums, teachers can provide mock instructions and realistic models of one might
encounter in the real world. This would give students the much needed exposure on how to
managing their finances, which is and will be prevalent in todays and future societies.
While society has extensively changed over the past 20 years, financial literacy has
managed to remain considerably stagnant, continuously relying heavily on the conventional
pen and paper classroom favored back in the late 1900s. But out of this static environment
sprouted ineffective and underdeveloped education, a heavy loss of motivation and interest for
financial literacy, and pools of illiterate citizens making their first independent, yet misguided,
steps out in the real world. But more recently, technology-reliant programs such as the Stock
Market Game and QuickBooks have managed to make significant strides in financial
education, effectively appealing to the digital natives of todays generation, while also
exposing students and teachers to real-world applications not found in a customary textbook.
Only by making the much-needed switch to a web-based classroom from the customary,

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outdated, paper and pen curriculum, can financial education truly help turn todays students
into tomorrows business leaders.

[Figure I]

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[Figure II]

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